Recently, Bitcoin prices have experienced intense volatility, dropping below $87,000 in a short period, with a single-day decline of over 8%. Since the high of 126,300 in October, the total retracement has exceeded 33%. The market is rife with voices claiming the "bull market is over," but a closer analysis of the driving factors behind this decline suggests the situation is far from as pessimistic as it seems.

**A Technical Pullback Resulting from Three Layers of Resistance**

The current decline is mainly due to the resonance of three factors. First, the U.S. Treasury recently withdrew approximately $200 billion in liquidity from accounts, coupled with the Federal Reserve slowing its rate-cutting pace, leading to overall tight dollar liquidity in the market, which hits high-volatility assets hardest. Second, breaking through key support levels triggered a chain of forced liquidations; on December 1 alone, over 190,000 traders were liquidated, totaling $553 million, which in turn triggered a negative feedback loop of "decline → liquidation → accelerated decline." Third, ETF net outflows exceeded $1 billion in a single week, with insufficient institutional capital inflows, further amplifying market panic selling.

This is a typical structural deleveraging phenomenon, fundamentally a liquidity and sentiment issue rather than a crack in Bitcoin's fundamentals.

**The Basic Logic Supporting the Bull Market Remains Intact**

Looking at the supply side, Bitcoin's total supply is fixed at 21 million coins. After the halving in April 2024, block rewards will decrease from 6.25 to 3.125 coins, with new supply continuously shrinking. On the demand side, in the first half of 2025, Bitcoin spot ETF net inflows exceeded $47 billion, as traditional giants like BlackRock are accelerating the allocation of Bitcoin into long-term asset pools such as pension funds. The supply tightening combined with increased institutional holdings has not changed.

Short-term price fluctuations cannot obscure the long-term value support. The current panic selling is essentially handing over chips to patient long-term participants.